Rent Collection
You can be a world class tenant screener and have the best looking rental property in town, but if you’re unable to collect rental payments from your tenants, on the day they’re due, it doesn’t mean diddley squat! And believe me, creditors today, especially mortgage lenders, don’t want to hear about rent collection problems, when they’re waiting on a late loan payment. So unless you have deep pockets, or the landlord equivalent of a sugar-daddy, who’s willing to subsidize your rental housing business, you need to know how to collect rental payments, when they’re due.
Don’t Offer Tenants Rental Payment Grace Periods
If I were you, I wouldn’t offer my tenants a so-called payment grace period, during which they can pay their rent, three to five days, after the first calendar day of the month. To me, payment grace periods are a bad business practice, that:
1. Eliminates any sense of urgency that tenants should have, about paying their rent on time.
2. Allows tenants to habitually pay their rent, on the last day of the grace period.
3. Stretches the rental payment collection process, from one to three or five days.
4. Denies landlords access to all rental payments, on the day they’re due.
5. Causes cash flow problems, when tenants don’t pay their rent within the grace period.
6. Stalls the eviction process, by giving tenants an additional three to five days, before landlords can serve them, with a three-day notice to pay rent or vacate the premises.
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Never Accept Partial Rental Payments from Tenants
I’m a firm believer in never accepting partial rental payments from tenants. I’ve found that most tenants use partial rental payments, as a stalling tactic, to avoid paying their rent in full, for as long as naïve landlords allow them to. The usual partial rental payment ploy includes the tenant’s promise, to pay the rent balance owed, by the fifteenth of the month. However, in most cases, the fifteenth comes and goes, and the rent still hasn’t been paid in full, and the gullible landlord has nothing to show for their patience. In the meantime, they’re fifteen days behind on the eviction process, and they haven’t even served their delinquent tenant, with a three day notice to pay rent or vacate the premises!
Serve a Three Day Notice to Tenants Who Fail to Pay Their Rent
I don’t know about you, but I’ve got much better things to do with my time, than chase after tenants for rental payments! So when a tenant fails to pay their rent on the day that it’s due, I serve them with a three-day notice to pay rent or vacate the premises. And I matter-of-factly tell the tenant, that they have three business days from today’s date, to pay their rent in full, or they’ll have to move. This lets my tenants know, that there are immediate consequences, when they don’t pay their rent on time. Plus, giving delinquent tenants a three-day notice, on the first day of the month, gets the eviction process started, in the event that they don’t pay their rent within the three-day period.
Chapter sixteen of The Florida Landlord's Manual contains detailed information on how to collect rental payments on the day they’re due, so you don’t end up chasing tenants all over town, in order to get paid.